Yahoo Finance Arm’s CEO Says New Markets and Improved Chips Are Key to Sustained Growth
(Bloomberg) -- Arm Ltd., seeking to sell shares to the public this year, can deliver sustained growth because its products are gaining ground in new markets, Chief Executive Officer Rene Haas said.
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The Cambridge, UK-based company, whose chip designs are the heart of most modern smartphones, reported revenue of $746 million in its most recent quarter, a 28% increase from the same period a year earlier. The division of Japan’s SoftBank Group Corp. has “well developed,” plans for an initial public offering by the end of the year, Haas said.
“Arm as a company is not the Arm that people knew a few years ago,” he said Tuesday in an interview. “It’s a diversified company. The key elements that helped Arm win in smartphones are the same ingredients that help us in the automotive and data center markets.”
The use of Arm’s designs and intellectual property is increasing because data center owners and automakers need chips that are more capable, but can work with limited access to power. While the smartphone market has slowed, Arm is gaining ground with new customers for processors that run the internet.
Arm’s performance is an outlier this earnings season, in which many chipmakers, including some of the biggest users of its technology, have reported precipitous declines in revenue. Consumers and companies are cutting back on spending for infrastructure and gadgets, leading to a huge accumulation of component inventory at device makers.
Haas said that his company’s growth is being driven by the adoption of more technology per device and higher licensing rates rather than increasing unit sales. Smartphones now have multicore processors and data centers are using more chips to run artificial intelligence workloads. Cars are increasingly home to multiple sensors and chips that provide their human drivers with more of the help and information that will eventually take over the job of piloting the vehicle.
“I think the area we will perform well in is power efficiency,” Haas said in an interview with Bloomberg Television. “These new AI algorithms are intensive, and in a world where we don’t have that much energy to throw at a problem, it’s going to be critically important.”
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